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epf > midterm > Flashcards

midterm Flashcards

1
Q

four basic questions

A

what goods and services should be produced to meet consumer needs, how should they be produced, who should produce them, who should receive them

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2
Q

traditional economy

A

economic system rooted in tradition, culture, customs, etc. (ex: fishing, bow and spear hunting)

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3
Q

command economy

A

economic activity controlled by a central authority (ex: vietnam, china, cuba)

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4
Q

market economy

A

economic system where economic decisions and prices are guided by interactions of the consumers (ex: us, uk, japan)

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5
Q

productivity

A

efficiency, cost of production is the total of certain costs associated with the production of goods

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6
Q

demand

A

the amount of goods and services customers are willing able to buy at a given price

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7
Q

supply

A

the amount of goods and services available in the market

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8
Q

law of demand

A

quantity purchased has inverse relationship, opposite direction (the higher the price, the lower the quantity demanded and the lower the price, the higher the quality demanded)

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9
Q

law of supply

A

direct relation between price and quantity, same direction (the lower the price, the lower the quantity supplied and the higher the price, the higher the quantity supplied)

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10
Q

equilibrium price

A

the quantity of goods supplied is equal to the quantity of goods demands

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11
Q

price elasticity

A

the degree buyers and sellers respond to price changes

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12
Q

price ceiling

A

limit on how high a price is charged for a product

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13
Q

price floor

A

lowest legal price an item can be sold

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14
Q

sole propiretorship

A

a business owned and operated by one person

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15
Q

partnership

A

when two or more people join together as co-owners

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16
Q

corporation

A

business organization most often created by under state laws, can legally enter into agreements, can own property and be sued

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17
Q

franchise

A

legal contract that gives a franchisee the right to use company’s trademark or trade name, business sytems, and process to produce and market a good or service

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18
Q

cost

A

value a producer gives up to produce a good or service

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19
Q

conglomerate

A

corporation made up of several different, independent businesses

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20
Q

price

A

amount of money that is needed to buy something

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21
Q

w-4 form

A

will fill this out to let my employer know how much to withhold from my paycheck

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22
Q

form w-2

A

receive this from my employer that lets me know how much money i made last year and how much was withheld for state, local and federal taxes

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23
Q

anticipated income

A

the amount of income the applicant can reasonably be expected to receive during the calendar year

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24
Q

discretionary income

A

money left over after a person pays their taxes

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25
Q

unanticipated income

A

surplus when the state has more resources available for the upcoming year

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26
Q

required deductions

A

an employer is legally obligated to withhold this money from an employee’s payroll check based on federal and state laws

27
Q

voluntary deductions

A

taken for programs in which individuals participate voluntarily (ex: health, insurance, retirement)

28
Q

examples of public goods

A

law enforcement, national defense, etc.

29
Q

fixed expenses

A

remain the same price

30
Q

variable expenses

A

price can change

31
Q

assets

A

the items your company owns that can provide future economic benefit (securities, jewelry, home)

32
Q

liabilities

A

what you owe to other (taxes, rent, or mortgage payments)

33
Q

perfect competition

A

large number of firms who sell an identical product, no single firm can affect the market price, firms are free to enter and leave market at will, each firm is independent (ex: farmers market where each vendor sells the same type of jam)

34
Q

monopoly

A

single producer controls an industry, no competition, limited choice and higher prices for consumers

35
Q

comparison shopping

A

ability to compare prices on products across different retailers and choose the store where the product is cheapest

36
Q

competition

A

rivalry among sellers in the same market to win customers

37
Q

smart goal

A

specific, measurable, achievable, relevant, and time-based

38
Q

unitary elastic demand

A

change in product price causes equal change in the quantity demanded

39
Q

merger

A

joining of two firms to form a single firm

40
Q

choice

A

deciding how to best use limited resources

41
Q

economics

A

study of how society chooses to use scarce resources to produce goods and services to satisfy unlimited consumer wants and needsn

42
Q

need

A

a requirement of survival

43
Q

trade-off

A

all the options you give up when you make a choice

44
Q

opportunity cost

A

the value of the next best option you gave up when you have a choice

45
Q

resources

A

money, materials or other items that can be used to meet a want or need

46
Q

scarcity (scarce)

A

when humans want more of a resource than is available (resource is limited)

47
Q

utility

A

how useful and satisfying something is to us

48
Q

want

A

something desired but not essential

49
Q

oligopoly

A

small number of firms dominate an industry, high start up costs and obstacles

50
Q

monopolistic competition

A

all the same qualities of perfect competition, except for identical produts. they sell similar products, but have their own uniqueness.

51
Q

product differentiation

A

process of creating differences between similar goods and services

52
Q

price leadership

A

dominant firm sets price and smaller firms follow

53
Q

collusion

A

producers get together to illegally set prices

54
Q

cartels

A

formal organization of producers that agree to coordinate prices and production; illegal in us

55
Q

natural monopoly

A

situation where cost of production is minimized by having only one firm

56
Q

us economy is driven by interaction of __ and __

A

producers and consumers

57
Q

driving force for producers

A

profit

58
Q

driving force for consumers

A

getting the “biggest bang for your buck”

59
Q

inelastic demand

A

demand responds slightly or not at all to a change in price (medication, gas, salt)

60
Q

elastic demand

A

demand responds to a change in price (cars, furniture, transportation devices)

61
Q

total costs formula

A

total fixed costs + variable costs TIMES quantity

62
Q

break even prices formula

A

total costs DIVIDED by quantity

63
Q

price formula

A

break even price + profit

64
Q

productivity formulas

A

output number/hours worked or output number TIMES unit price

epf (6 decks)

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